Apr 07, 2020

Coronavirus: Guam Struggles with Declining Tourism

The US territory of Guam is facing number of challenges in the combat against the coronavirus. The island's economy depends massively on tourism, an industry that has been decimated by the virus, which means that it will suffer the consequences of the virus even more deeply than other states and territories with more diversified economies. The connection to the island, too, has been deeply affected. The first week of March saw almost 50% fewer tourists due to the global COVID-19 pandemic. Moreover, Guam's primary tourist markets, South Korea and Japan, are now subject to a 14-day quarantine, although travelers from these countries generally book stays of less than a week, according to Guam Visitors Bureau statistics. 

Below is an article published by Pacific Daily News

The COVID-19 pandemic has already resulted in layoffs on Guam.

And more layoffs are being planned, according to Mary Rhodes, president of the Guam Hotel and Restaurant Association. Many businesses have reduced employees' hours, too.

Rhodes didn't have an estimate as to how many layoffs have occurred.

Island businesses have been hit hard. The first week of March saw almost 50% fewer tourists due to the global COVID-19 pandemic. On Wednesday, Adelup provided guidelines for a mandatory 14-day quarantine of all incoming travelers from areas affected by COVID-19.

Guam's primary tourist markets, South Korea and Japan, would be subject to this 14-day quarantine. Travelers from these countries generally book stays of less than a week, according to Guam Visitors Bureau statistics.

Rhodes said the quarantine will have a tremendous impact: Tourists will just stop coming and airline cancellations will increase.

Jeju Air canceled multiple Guam flights. Its daily morning Incheon flight, its Narita flights from March 21 through April 28 and its Busan flights through March 28 are all suspended, according to Rolenda Faasuamalie, Guam International Airport Authority marketing administrator. T'Way Air canceled daily Kansai International Airport flights through April 5, and canceled its Incheon flights from April 6 through April 28, Faasuamalie said Wednesday.

Businesses will have to make hard decisions about their operations during this time, Rhodes said, including whether to continue operations at all for the time being.

The severe impacts extend beyond those strictly in the tourism industry.  

Hard Hit 

Micronesia Mall's Tango Theaters usually sees 25 to 50 people watching a midday movie. On Wednesday, there were just two.

Moviegoers are down 90%, said manager Marylou Mejares. Mejares' theater is the only one still open on island: Agana Shopping Center and Guam Premier Outlets theaters are closed until further notice.

Countless businesses across island are temporarily closing, limiting operations and adjusting hours in the midst of the COVID-19 pandemic. As of Wednesday evening, there were 8 confirmed COVID-19 cases on Guam.

Multiple restaurants, like Ban Thai Guam and Pika's Cafe, have suspended in-house dining.

Full coronavirus impact unclear

The reductions may be just the beginning, but it's impossible for anyone to predict the full impact of COVID-19 on Guam's economy, because no one knows how long the pandemic will stretch on, said Joe Bradley, chief economist with the Bank of Guam.

However, 40% of income on island comes from tourism, according to Bradley. With that 40% severely strained under the pandemic, it's definitely not looking good.

This is the consequence of having a two-legged economy, Bradley said. With only tourism and military to rely on, a pandemic like this can have devastating consequences.

"The ripple effects of the pandemic are not only spreading further, but the ripples are getting higher, and I don't know for how long and I don't know how severe," Bradley said.

Rhodes and Bradley said that at this time, the health and safety of the island must be priority. Despite the economic consequences that a lack of tourism entails, containment is necessary, they said.

"We can't afford for this disease to spread quickly," Bradley said. "We all have to strike a balance with life, health and maintaining employment, paying our bills, paying our loans."

The Guam Hotel and Restaurant Association is coordinating with the government to provide displaced workers with resources, Rhodes said.

Meanwhile, government officials are seeking further ways to help residents facing financial hardship.

$1,000 per adult

Guam will be included in a federal legislative proposal that, if passed, would provide $1,000 per adult and $500 per child during the COVID-19 pandemic, according to Del. Michael San Nicolas.

U.S. Treasury Secretary Steven Mnuchin outlined a variety of potential proposals to Senate Republicans Tuesday as part of a legislative package to help Americans and industries reeling from the coronavirus, USA TODAY reported.

The Trump administration proposed an initial $250 billion could be sent to Americans as early as the end of April if it can muster congressional approval, USA TODAY reported.

"We want to assure the people of Guam that the proposed $1,000 per adult and $500 per child being discussed will, in fact, include Guam and all territories if it comes to fruition, and this support could possibly be extended on a monthly basis for as much as three months with a review at the end of that period," San Nicolas said.

San Nicolas said it's all still preliminary, but Guam is definitely at the table.

USA TODAY reported Sen. John Thune, the Republican majority whip, said getting cash assistance to Americans is something that has historically taken some time, but “I think there are ways now electronically that you can process things more quickly.”

The South Dakota Republican said while an exact date remains up in the air, cash assistance could potentially start to go out in late April.

“I think that'd be a good start date.”

The proposal has fairly widespread support from Senate Republicans, who say it will offer immediate assistance to Americans impacted by the virus. Some lawmakers have varying ideas about how the proposal should work, including who should receive the payments and how much each American should get.

The idea was originally raised by Sen. Mitt Romney, R-Utah, who proposed sending $1,000 to each U.S. adult.

Unemployment benefits

A legislative session to discuss a bill that would provide unemployment benefits for those affected by the crisis has been delayed until Monday.

Vice Speaker Telena Nelson introduced Bill 313, she said, due to layoffs that those in the industry may suffer during this public emergency.

The Unemployment Benefits Act of 2020 would create an unemployment benefits fund to provide workers with financial assistance in the event of unemployment under emergency circumstances, including public health crises. The bill would allow Guam to avail of federal unemployment benefit funds, according to Nelson.

"The bill intends to provide a safety net for those worst affected by the trickle-down effects of disasters or public health emergencies, those who may lose employment or wages and have little to no other financial means," Nelson's office stated.

Guam doesn't currently have the mechanisms in place to avail of federal help for unemployment benefits. The U.S. Department of Labor said because Guam doesn't have a local unemployment benefits program, the island doesn't qualify for federal unemployment benefits under H.R. 6201, which responds to the coronavirus outbreak through various measures, including expanding unemployment benefits.

"The U.S. Department of Labor confirmed with our body that our island does not currently qualify for federal unemployment benefits since we do not yet have an unemployment benefits program. The Unemployment Benefits Act of 2020 sought to rectify this issue and provide the mechanism necessary for our island to support our families during hard times," she said. “I’m disappointed that we’re delaying action that is necessary to provide a safety net for our families and the potential hardships they may face in the near future. In line with the facts of COVID-19 on our island, we realize that our tourism industry is in increasing decline and that our hotels and businesses will see a drastic drop in customers with the governor’s mandate to prohibit gatherings of 50 or more people."

Even if Nelson's bill passes, availing of the federal funds may take more time, according to a letter from the U.S. Department of Labor to Speaker Tina Muña Barnes. Guam's government will have to coordinate with the federal labor agency to ensure its benefits programs meet federal standards, then the Secretary of Labor would need to certify Guam's unemployment program.

Photo: Rick Cruz/PDN)